The Times-Picayune archiveA golfer lines up a shot at the Colonial Golf and Country Club in Harahan in 2009. The club has struggled financially over the past several years.

Its major lender, Louis Lauricella-owned Colonial Finance, foreclosed on the embattled 83-year-old club in May after negotiations failed to settle the club’s $6 million debt.

The Jefferson Parish Sheriff’s Office seized the property in June. The sale is set to take place at 10 a.m. at the department’s West Bank headquarters, 1233 West Bank Expressway, Harvey.

Stephen Dwyer, attorney for Colonial Finance, said the company intends to bid the amount of the debt against the loan.

“We hope somebody comes in and bids higher and pays us off,” he said. “We don’t want the property. We want to pay our debt.”

The scheduling of the auction is the latest develoment in a decade-long financial and political struggle to keep the club open or, if it is sold, at least to retain its abundant green space instead of redeveloping it for residential or commercial use.

TMT Acquisitions LLC, owned by club member Tony Manzella Jr., acquired a controlling interest in the club’s stock in late May. In selling to Manzella, Colonial stockholders turned down Lauricella’s original request to settle the club’s debt: transfer ownership of the property to his Colonial Finance.

In return, Lauricella promised to run the country club as is for at least a year and make upgrades. But club members were concerned that Lauricella would guarantee to save only 25 percent of the club’s 88 acres of green space.

Manzella vowed to keep the club’s 18-hole golf course intact, and stockholders sold him a controlling interest on May 19 for $100. Shortly after taking over the club, Manzella said he made some upgrades and repairs, improved the maintenance of the golf course and lowered fees to attract new members.

But Colonial Finance then asked to be paid in full by the end of May, rebuffing an offer from TMT Acquisitions to cut the debt and allow the club it pay it off over 10 years, Dwyer has said.

Manzella’s attorney, Jay Beatmann, said in June that Manzella was willing to discuss a resolution, but one never surfaced Beatmann did not return calls this week.

Patrick Lynch, an accounting professor at Loyola University, said Lauricella’s bid at the auction would protect his own interests.

“He may bid to make sure it doesn’t get sold at a lower price,” Lynch said.

Short of paying off the debt in full, Lynch said, the club might not be able to halt the auction. Colonial could file for reorganization under Chapter 11 of the federal bankruptcy code, and a judge might then postpone the auction until the case could be heard. But Colonial would have to present the court with a credible plan to pay off the debt.

“This thing has been going on for so long, they’re going to be looking at this thing with a jaundiced eye,” said Lynch, who questioned why the club would wait until the 11th hour to file for bankruptcy if such a reorganization plan existed.

And if a reorganization plan is presented only to be deemed meritless, the judge could put Colonial into Chapter 7 bankruptcy and appoint to trustee to liquidate its assets and pay off the debt, Lynch said.

Dwyer said he has not heard lately from Manzella or Beatmann.

“I really don’t have any clue about what might happen, We’re planning to move forward,” he said.

Meanwhile Harahan officials and residents are worried about what a sheriff’s sale would mean for the city and the green space that plays a significant role in drainage south of Jefferson Highway.

“We need to keep as much green space as possible,” Mayor Paul Johnston said. “We don’t want anybody to come in and buy the land and build a bunch of houses.”

Johnston said officials won’t be able to stop all development on the golf course if the property should go to an outside developer, but the city will have a some say in what is built.